Allegheny Power 2014 Annual Report Download - page 119

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104
The following table provides a reconciliation of changes in the fair value of FirstEnergy's derivative instruments subject to regulatory
accounting during 2014 and 2013. Changes in the value of these contracts are deferred for future recovery from (or credit to)
customers:
Year Ended December 31
Derivatives Not in a Hedging Relationship with
Regulatory Offset NUGs LCAPP(1) Regulated
FTRs Total
(In millions)
Outstanding net liability as of January 1, 2014 $ (202) $ — $ — $ (202)
Unrealized gain (loss) (1) — 13 12
Purchases — — 11 11
Settlements 52 — (13) 39
Outstanding net asset (liability) as of December 31, 2014 $ (151) $ — $ 11 $ (140)
Outstanding net liability as of January 1, 2013 $ (254) $ (144) $ — $ (398)
Unrealized gain (loss) (23) (22) 4 (41)
Purchases — — (3) (3)
Terminations — 166 — 166
Settlements 75 — (1) 74
Outstanding net liability as of December 31, 2013 $ (202) $ — $ — $ (202)
(1) LCAPP contracts are financially settled agreements associated with capacity in New Jersey. During the fourth quarter of 2013, all LCAPP
contracts were terminated after being declared unconstitutional by the U.S. District Court for the District of New Jersey.
11. CAPITALIZATION
COMMON STOCK
Retained Earnings and Dividends
As of December 31, 2014, FirstEnergy’s unrestricted retained earnings were $2.3 billion. Dividends declared in 2014 were $1.44
per share, which included dividends of $0.36 per share paid in the first, second, third and fourth quarters of 2014. Dividends declared
in 2013 were $1.65 per share, which included dividends of $0.55 per share paid in the second, third and fourth quarter of 2013.
The amount and timing of all dividend declarations are subject to the discretion of the Board of Directors and its consideration of
business conditions, results of operations, financial condition and other factors. On January 20, 2015 the Board of Directors declared
a quarterly dividend of $0.36 per share to be paid in the first quarter of 2015.
In addition to paying dividends from retained earnings, OE, CEI, TE, Penn, JCP&L, ME and PN have authorization from the FERC
to pay cash dividends to FirstEnergy from paid-in capital accounts, as long as their FERC-defined equity to total capitalization ratio
remains above 35%. In addition, TrAIL and AGC have authorization from the FERC to pay cash dividends to their respective parents
from paid-in capital accounts, as long as their FERC-defined equity to total capitalization ratio remains above 45%. The articles of
incorporation, indentures, regulatory limitations and various other agreements relating to the long-term debt of certain FirstEnergy
subsidiaries contain provisions that could further restrict the payment of dividends on their common stock. None of these provisions
materially restricted FirstEnergy’s subsidiaries’ abilities to pay cash dividends to FirstEnergy as of December 31, 2014.
Stock Issuance
In 2014, FE issued approximately 2 million shares of common stock to registered shareholders and its employees and the employees
of its subsidiaries under its Stock Investment Plan and certain share-based benefit plan obligations.